A new Polymarket account made over $500k betting on the U.S. strike against Iran
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Polymarket is huge some people are bound to have impressive runs.
This person hand multiple stacked bets for this outcome by varying dates.
> Yes this is just survivorship bias.
Of course, not all winners are insiders. You still need to filter more, but it's definitely the first filter. Big winners are the second, for the same reason: scale of exploitation.
“Already addressed this, wasn't on purpose and everything else still stands.”Notice how the bettor hedged and bet on multiple days and hedged each of their bets with a "by" clause. This is a bog standard hedging strategy that anyone who's been to a racetrack would know.
On a separate note, gamified prediction markets should not exist - they create perverse incentives and are basically a gamification of futures contracts (which requires a degree of risk management and hedging experience the median individual simply lacks), but this specific example doesn't seem like insider trading, just a seasoned gambler who knows basic hedging strategy.
If you don't like prediction markets, you don't have to use them.
Why do you think other people shouldn't be allowed to use prediction markets if they want to?
In aggregate, most participants lack the background and experience needed to hedge against risk and bet intelligently.
Gamifying a financial instrument (futures) that is supposed to be used as an risk management device and advertising it to the lowest common denominator without providing the right checks and balances will leave a large portion of bettors worse off.
Heck, I'm decently good at blackjack, poker, and backgammon because it's fun to apply probability theory principles, but I would never dare put my personal money on such an investment when I would do significantly better in aggregate with other more diversified personal investments.
2. It encourages the leaking of classified information.
You should not be able to get rich to the tune of a 600% daily return just because you're insider trading. That doesn't incentivize sharing your information with the market. On the contrary that incentivizes delaying communicating your secret information until the last second to maximize the return on your unexpected information.
why can't it be both? you think degenerate gamblers have never had a government job?
Using a public betting platform with KYC vetting is not that.
Betting a strike would be on Friday also tracks - anyone who's been outside the West knows they have Friday/Saturday off in Muslim and Jewish countries. It's the same way we in the West tend to conduct strikes on Saturday.
Edit: Ah I get what you are saying now.
People don't play in corrupt markets for very long.
To corrupt a sport bet, there needs to be an actual manipulation of events perpetrated by a very small, very closely watched and analyzed group of people (athletes or officials).
In my view, it seems immediately obvious that as prediction markets become even more mainstream (and so the billboard effect gets stronger), Polymarket bets will have a significantly higher rate of corruption than sports bets.
Information about a players wellbeing and their life goes a long way. Example, they would pay paper boys to talk to coaches to find out non public information. Such as if a player of the team is going through relationship problems.
It's a classic though for sure
Every important event in the world has dozens if not hundreds of people "in the know" before it happens. Not everyone has paper boys, chatty coaches, or the time/energy required to connect all those dots.
The entire flow insider information is reversed from "go out and look for it" to "invite it in anonymously"
Forget it jake, it's Polymarket.
As the billboard glow inviting insiders to trade gets brighter, the markets get less useful, less fun, less interesting, and obviously less rewarding.
I think it's pretty obvious when betting on events that are inherently just decisions by one or a few people (e.g. when will Trump launch an attack on Iran, when will a company launch a new product, will some company acquire another one, etc.) that they will attract insider trading and corruption by their very nature - all that's necessary is to have information about the decision maker. This is fundamentally different than events that are subject to forces that no single individual controls - e.g. who will win an election, where will a crypto price be in a year, movie box office results, etc.
I think betting on "single decision maker" events is just a "sucker is born every minute"-type bet.
It's hard to measure what anyone actually believes in the current social landscape, where nobody tells the truth. Maybe that's the real purpose of prediction markets.
[0] https://en.wikipedia.org/wiki/Wisdom_of_the_crowd
Edit:
Actually, turns out "people claiming" includes Polymarket lol
# What is Polymarket
...
Our markets reflect accurate, unbiased, and real-time probabilities for the events that matter most to you. Markets seek truth.
# How accurate are Polymarket odds?
Research shows prediction markets are often more accurate than experts, polls, and pundits. .... Their economic incentives ensure market prices adjust to reflect true odds as more knowledgeable participants join.
This makes prediction markets the best source of real-time event probabilities. People use Polymarket for the most accurate odds, gaining the ability to make informed decisions about the future.
https://help.polymarket.com/en/articles/13364060-what-is-pol...
> one ultimate ending where everything is done for the betting
It really does seem that gambling has this sinister power to cannibalize whatever is being gambled upon, twisting it and transforming it into whatever maximizes the ability for market-makers to generate profit, sharps to extract alpha, and addicts to get their hit of dopamine.
No, the best way to win on Polymarket is purely by insider trading. Which is why it's a useful thing to watch. Insider news..
That said, the definition of 'insider trading' is always tricky. At what point does it become insider? Some things people call insider others just call clever detective work.
So how useful is it really to see a big bet and know that probably the thing in question will happen in the next hour?
The only kind of use case I can see for these markets is what another commenter mentioned, as a kind of strange insurance by betting against what you hope will happen. But even then, the finicky rules and untrustworthiness of the Polymarket admins make them much less reliable than a traditional insurance policy...
That maybe true in a normal world, but we left normalcy in this world a couple of administrations ago. I absolutely would not put it past a member of this admin to be keeping an eye on things like this to suggest it would be better to start the attack on specific day just to pad the coffers. Any other admin, and I'd say that would be an insane line of thought, but it is this admin.
Looks like “we” need to update our relationships with markets
Price discovery is a visualization of the collective conscious, and the evolution of markets gets closer and closer to direct exposure to an event. Share and derisk a transaction, cleanly, quickly
Reduce all frictions towards doing so
Frictions include finding the person making the transaction, negotiating with them, trusting them to perform, disputing resolution, insurance. These hamper anything from occurring, or occurring quickly, and the pricing is too variable. Prediction markets are an example of all of those frictions being reduced to almost non-existent. And dispute resolution will improve further and attract more liquidity.
crypto anarchist papers described prediction markets to be used for something like this in the 90s, but there are several levels of infrastructure that didn't exist then
if you are predicting such things are occurring then you could also buy the no shares, making it the most egalitarian social mobility opportunity out there. I think the focus on bribery and corruption is distracting because people are imagining exclusion, but its the opposite at this point.
Imagine when the soviet union fell and only people that built relationships got dibs on all the assets and revenue streams to become "the oligarchs" almost overnight, but instead of only them, everyone paying attention could take part in it. That's what is happening now and the markets will continue existing autonomously
What's the incentive of betting if you're not an insider? You're better off putting you money on a fair coin toss, instead of hoping you'll somehow beat an openly rigged market.
How much have you yourself made in these sorts of markets?
Some insider selling changes the prediction downwards
The WANT the information
I dont think I was special or unusual.
The point is for business with vested interests (and therefore often inside information) to use these markets to hedge for things that will materially affect their profitability.
For example, in this case, suppose you ran a company that was shipping goods through the Middle East, and a war would disrupt your business. You would then place bets on there being a war, so that if it does happen you will recover some of your losses. You might know inside information because your work in the region, but that is expected.
Especially when everyone notices the polymarket bets that win big but nobody notices the ones that fall on their face. There is huge survivorship bias in these sorts of analyses
"harmless betting" for thee
These markets claimed to be useful tools for discovering truth. I'm not sure what being able to maybe predict a military strike a bit earlier provides to society, but I do know that creating a system for near-unlimited wealth extraction for those with power is a very bad thing.
Importantly, people who either thought they had better information (and were sadly wrong) or people who were simply gambling. It’s not like prediction markets are taking money from orphanages.
Clearly, a staffer in the MoD who knows what's going on and places a "bet" is bad. But is "private" information even well defined here? If a well funded HF asks 50 staffers "is Iran going to be invaded today", they all say "of course not, we're negotiating" but 3 look uncomfortable, is that MNPO? If a civilian provider, not sworn to secrecy, receives a large order indicative of some military action, then places bets, is that insider trading?
My point is less that it's fine, and more that it was a good thing to keep them banned, until and unless we figure out a better way to regulate them.
Public markets are different because the concept of "insider" information is so clearly defined and almost central to all information processing. Government business has other priorities than "how to we keep all gamblers chances equal".
Israel struck because they had info that some people were going to be at a specific place at a specific time. One would suppose they could have chosen Saturday for another reason only if they had the luxury of continuous intelligence providing multiple options with equal chances of success. In that case, choosing that day to avoid unnecessary economic volatilty for you and your allies makes sense.
If someone truly made this bet with inside information, they for sure broke laws. Not only did they do that, they could have jeopardized parts of the mission.
No doubt in my mind, part of OSINT gathering for most intel agencies is to monitor these betting markets.
The Iran protests happened, Iran massacred a bunch of protesters, Trump said "Help is on the way". Then US aircraft carriers started moving towards the middle east. Trump started negotiating with Iran, making demands Iran would never agree to. Trump gave his usual ultimatums, aircraft carriers finally got into position, Iran still being belligerent, and nearing the end of Trump's ultimatum... Like, all the signs were there. There's a strange consistency to Trump's erratic behaviour...
But in this case I guess there wasn't enough pushback. And the thing that made it if not obvious certainly rather likely was the aircraft carrier movement which isn't exactly subtle, though very often just used for intimidation.
The thing which is at least a little surprising is the talk about aircraft carriers being very vulnerable to attack with drones / cheap missiles / etc. didn't materialize and if it were going to, Iran would be the one to realize it unless a full on world war were to erupt.
I feel like he mostly chickens out on tarrifs or things that have a large potential for high costs or where the opponent has some actual leverage.
Here he is blowing up Iran. Iran doesnt really have the ability to blow up america in return. This is exactly the sort of thing i would expect him to follow through on.
> The thing which is at least a little surprising is the talk about aircraft carriers being very vulnerable to attack with drones / cheap missiles / etc.
I think that is because it was largely wishful thinking. At least when it comes to Iranian capabilities. I dont think people who were experts in the field believed Iran had the capabilities to seriously harm american aircraft carriers.
Also, do you have a link that someone lost $500k? Because it's not in the original link.
Any money you win gambling has to come from someone else, it doesn't just appear.
Yes, generally both sides of the book balance (minus a cut for the bookie). But there's not automatically another exactly opposite bet of the same size lol.
Like if you say "someone is at the door", you don't literally mean that exactly one person is at the door.
And someone at the door? If you see 3 people, you don't say someone. You'd only say someone if you're expecting it to be one person (which it usually is knocking at a door).
The large protests passed their peaks a while ago. The American military has been deploying to the area for a while. This attack could've happened any day in the past weeks, or it could've taken another couple of weeks of shit flinging, slow escalation, and meaningless threats from Iran's government.
Grok predicted it.
The signs were there. Plans changing is their story, but the US buildup had just finished days prior.
> "we design the rules to prevent people from profiting from death"
Read the fine print!
The goal of a prediction market is to be able to forecast the future as accurately as possible. Restricting informed traders weakens the mechanism that makes them useful.
Money signals how strongly someone believes something will happen.
Please look at the name again. It's "prediction" market. So if you have credible information before resolution, it's no longer a prediction.
Also your premise is incorrect. The goal of prediction market isn't that. It's to represent wisdom of crowd. Informed traders who can influence the outcome are no longer using any wisdom, nor they're part of the crowd.
Yes prediction markets represent "wisdom of crowd", and they do this by rewarding people who contribute correct information. So informed traders are the ones making the system work, and they're putting actual money on the line to back up their claim. Without them you're just left with uninformed guesses, which isn't really "wisdom of crowds", it's noise.
But if you're defining an informed trader to already know the answer, then it's problematic. I hope you see that as well. The market should reward some logically deduced conclusion, not power. That's my position.
Also it's not noise, an average trader is not choosing a random number between (0,1). They can do research and their guess can be informed. Hence, the use of word wisdom. By your definition, this is gambling then.
If the goal is to produce the most accurate forecast possible, then informed traders (especially asymmetrically informed traders) are a feature of the system, not a bug. The market is a system for discovering the truth, and it generally rewards whoever brings that truth to the table first.
If the goal is to create a fair playing field where the crowd collectively arrives at an answer, then yeah someone with private information becomes problematic.
But I'd argue that's optimizing for fairness at the cost of accuracy, and accuracy is much more important.
Like, if I know a month ago that the US will invade Iran, and I make a big bet on "Yes", then that of course gives people information, which in turn negates my edge. So it's entirely self-defeating. It's actually way better to try to convince the general public that it won't happen through non-market means, or perhaps even buy a few "No" shares just to drum up public opinion. You'll get that money back anyway once the bet resolves.
Just imagine: the boxing champ is planning to take a dive in the third round. You think he'll make his bet a week in advance?
Also this needs waaay more information before you can say if it is statistically significant. How much did they stand to lose? How many other people made similar bets? Etc.
As it stands this is not a story.